Lam Research (NASDAQ:LRCX) Stock Price Down 2.7% - Here's What Happened

Key Points

• Lam Research shares fell 2.7% to $320.59 on Thursday, with trading volume below its average. The decline may reflect profit-taking after the stock’s roughly 73% gain this year.
• The company continues to benefit from strong demand for semiconductor equipment tied to AI chips, advanced packaging and high-bandwidth memory. Its latest quarter exceeded expectations, with EPS of $1.82 and revenue of $6.72 billion, up 30% year over year.
• Analysts remain broadly positive, with a consensus “Moderate Buy” rating and a $364.59 price target, though valuation is a concern at roughly 55.7 times earnings. Lam also raised its quarterly dividend to $0.33 per share from $0.26.

Shares of Lam Research Corporation (NASDAQ:LRCX - Get Free Report) fell 2.7% on Thursday. The stock traded as low as $316.66 and last traded at $320.59. 8,957,749 shares changed hands during trading, a decline of 16% from the average daily volume of 10,726,895 shares. The stock had previously closed at $329.51.

Key Lam Research News

Here are the key news stories impacting Lam Research this week:

• Positive Sentiment: Lam Research is benefiting from rising demand for semiconductor-manufacturing equipment, particularly from advanced packaging, high-bandwidth memory (HBM) and AI-related chip production. The company’s earnings growth, improving margins and strong return on equity support the long-term investment case. Is Lam Research a Smart AI Stock Pick for Long-Term Investors?
• Positive Sentiment: Lam was highlighted alongside NVIDIA, Applied Materials and TSMC as a chip-industry company with dependable earnings and exposure to the AI investment cycle. Its latest reported quarter also exceeded analyst expectations for both earnings and revenue, with revenue up 30% year over year. 4 Top Chip Stocks With Dependable Earnings to Ride the AI Boom
• Neutral Sentiment: Lam Research is receiving unusually high investor attention, but the “trending stock” coverage does not identify a new company announcement or fundamental catalyst. Lam Research Is a Trending Stock
• Negative Sentiment: Valuation remains a key concern. Analysts note that Lam is growing faster than KLA but trades at a similar forward earnings multiple and at a higher price relative to trailing free cash flow. With the stock up roughly 73% this year, investors may be taking profits or demanding stronger evidence that AI-related growth can justify the premium. Is Lam Research a Smart AI Stock Pick for Long-Term Investors?

Analysts Set New Price Targets

A number of equities research analysts have commented on LRCX shares. Rothschild & Co Redburn increased their price target on Lam Research from $305.00 to $420.00 and gave the company a "buy" rating in a research note on Wednesday, June 17th. Deutsche Bank Aktiengesellschaft restated a "buy" rating and set a $320.00 price target on shares of Lam Research in a research note on Thursday, July 30th. Citigroup reaffirmed a "buy" rating and issued a $450.00 price objective (up from $315.00) on shares of Lam Research in a research report on Wednesday, June 17th. Jefferies Financial Group set a $335.00 target price on shares of Lam Research and gave the stock a "buy" rating in a research note on Thursday, July 30th. Finally, Wells Fargo & Company restated an "overweight" rating and set a $350.00 price target (down from $450.00) on shares of Lam Research in a research note on Thursday, July 30th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating and five have issued a Hold rating to the company. According to data from MarketBeat, Lam Research has a consensus rating of "Moderate Buy" and a consensus price target of $364.59.

Lam Research Trading Down 2.7%

The company's fifty day moving average is $310.02 and its two-hundred day moving average is $305.12. The company has a debt-to-equity ratio of 0.30, a quick ratio of 1.91 and a current ratio of 2.63. The company has a market cap of $401.19 billion, a price-to-earnings ratio of 55.66, a P/E/G ratio of 1.32 and a beta of 1.85.

Lam Research (NASDAQ:LRCX - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The semiconductor company reported $1.82 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.69 by $0.13. The company had revenue of $6.72 billion during the quarter, compared to analyst estimates of $6.66 billion. Lam Research had a net margin of 31.27% and a return on equity of 67.60%. Lam Research's revenue for the quarter was up 30.0% compared to the same quarter last year. During the same period last year, the firm posted $1.33 EPS. Lam Research has set its Q1 2027 guidance at 2.000-2.300 EPS. On average, research analysts anticipate that Lam Research Corporation will post 9.34 EPS for the current year.

Lam Research Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, October 14th. Shareholders of record on Wednesday, September 23rd will be issued a $0.33 dividend. The ex-dividend date of this dividend is Wednesday, September 23rd. This is a positive change from Lam Research's previous quarterly dividend of $0.26. This represents a $1.32 annualized dividend and a yield of 0.4%. Lam Research's dividend payout ratio is currently 22.92%.

Insiders Place Their Bets

In other news, insider Ava Harter sold 5,000 shares of the business's stock in a transaction dated Monday, August 31st. The stock was sold at an average price of $302.46, for a total value of $1,512,300.00. Following the completion of the transaction, the insider owned 42,462 shares of the company's stock, valued at $12,843,056.52. The trade was a 10.53% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Abhijit Y. Talwalkar sold 18,282 shares of the company's stock in a transaction dated Monday, July 13th. The stock was sold at an average price of $335.00, for a total value of $6,124,470.00. Following the completion of the sale, the director owned 87,142 shares in the company, valued at $29,192,570. The trade was a 17.34% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders have sold 32,839 shares of company stock valued at $10,644,740. Company insiders own 0.31% of the company's stock.

Institutional Investors Weigh In On Lam Research

A number of hedge funds and other institutional investors have recently made changes to their positions in the company. Bayban acquired a new stake in Lam Research in the 4th quarter valued at $26,000. Vermillion Wealth Management Inc. acquired a new position in Lam Research during the first quarter worth $26,000. Cedar Mountain Advisors LLC raised its position in Lam Research by 242.9% during the first quarter. Cedar Mountain Advisors LLC now owns 120 shares of the semiconductor company's stock worth $26,000 after acquiring an additional 85 shares during the period. Paladin Partners LLC purchased a new position in Lam Research during the second quarter valued at $26,000. Finally, University of Illinois Foundation purchased a new position in Lam Research during the fourth quarter valued at $30,000. Institutional investors and hedge funds own 84.61% of the company's stock.

About Lam Research

Lam Research Corporation is a semiconductor equipment company that designs, manufactures, and services systems used in the fabrication of integrated circuits and other electronic devices. Its equipment supports key steps in the wafer manufacturing process, helping semiconductor producers create increasingly small and complex features on silicon wafers.

The company's portfolio includes systems for etch, deposition, wafer cleaning, surface preparation, and related manufacturing processes.

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